Book Value To Equity Formula

Calculate book value of equity by subtracting a firm s total liabilities from its total assets to arrive at stockholders equity.

Book value to equity formula. Book value of equity also known as shareholder s equity is a firm s common equity that represents the amount available for distribution to shareholders. The book value of equity is simply the difference between the total assets of a business and its total liabilities. Book value per share will be bvps 495 61 book value calculator.

Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. The book value of equity is equal to total assets minus total liabilities preferred stocks and intangible assets. You can use this book value calculator.

What does book value of equity mean. Book value of equity formula. Net income on a per share basis is referred to as eps or earnings per share.

This figure represents the minimum value of a company s. Therefore the calculation of book value per share will be as follows bvps total common shareholders equity preferred stock number of outstanding common shares 2 93 491 00 cr 592 18 cr. Book value is the amount that investors would theoretically receive if all company liabilities were subtracted from all company assets.

Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. Roe is net income divided by stockholder s equity.

Using the accounting equation the book value of equity formula can be stated as follows. This leaves a residual amount available for distribution to investors the concept is used to establish the minimum amount that a business should be worth which can be considered the lowest price at which the sum total of its stock should trade. For example in apple s 1q report released february 1 2018 the company reported total assets of 406 794 billion and liabilities of 266 595 billion.